Defined methods to grow replicative cultures of normal human bronchial epithelial (NHBE) cells without serum have been developed. These cells can be subcultured several times; will undergo 35 population doublings; and have expected epithelial cell characteristics of keratin, desmosomes and cell surface antigens. NHBE cells inoculated at clonal density will multiply with an average generation time of 28 hr; the majority of the cells are small and migratory and have few tonofilaments. Adding human whole blood-derived serum (BDS) depresses the clonal growth rate of NHBE cells in a dose-dependent fashion. In contrast, human lung carcinomas either replicate poorly or fail to grow at all when inoculated at clonal density in serum-free medium. Their rates of multiplication increase in direct proportion to the amount of BDS added to the optimized medium. Type beta transforming growth factor (TGF-beta) was found to be the primary differentiation- inducing factor in serum for NHBE cells, while TGF-beta was not growth inhibitory for malignant cells. These differential effects of TGF-beta on normal versus malignant cells are not because of lack of TGF-beta-specific receptors on malignant cells. Epinephrine antagonized the effect of TGF-beta without altering characteristics of TGF-beta-specific receptors.